The town grew during the 19th century, and was in 1879 officially named Penha Rio do Peixe (after the church, Nossa Senhora da Penha, and a nearby river, Rio do Peixe).
The small town gained unwelcome fame after a widely-publicized murder in February 1888. The campaign to abolish slavery was then at its height (and was finally successful two months later). Already, many slaves were absconding. The local police chief, Joaquim Firmino de Araújo Cunha, known for his abolitionist views, was rumoured to protect and assist runaway slaves. An angry group of local farmers surrounded his house and beat him to death. The murder and the subsequent trial (no-one was convicted) attracted much newspaper coverage, making Penha Rio do Peixe notorious. Two years later the town asked for its name to be changed to Itapira (a name drawn from the Tupi language).
Today Itapira services an agricultural hinterland which grows oranges, sugar-cane, cattle and (now-declining) coffee, but is also a manufacturing centre, specializing in wood and paper products, agricultural machinery, and ethanol production. The establishment in 1937 (by spiritist groups) of the pioneering Instituto Bairral psychiatric hospital in Itapira has fostered a well-developed health sector, both public and private. The town is home to a large number of professionals (such as the noted economist J.B. de Souza Ferreira Fo.), many of whom commute to neighbouring towns such as Campinas. The current mayor is José Natalino Paganini, an ex-footballer.
The town's Historical Museum displays interesting relics of one of the last major battles of the Paulista War, which was fought nearby.